pass any laws they need to pass to do any ruling they need to do. the people will not back off and say we have the people to do it. why not do the work we need to do. host: thank you for all your calls. we'll be back tomorrow 7:00 eastern for washington journal. tomorrow, we'll talk with a guest from penn state university. flynt leverett. and charlie cook, stu rothenberg. enjoy your saturday and we'll see you here tomorrow. . .

>> we talked to the head of the nonprofit agency that manages internet names and addresses. then a forum by "the economist"

magazine. the economy and the environment. >> today on "america and the courts," an interview with supreme court clerk william suter at 7:00 p.m. eastern here on c-span. >> fox news contributor michelle malkin is our guest this weekend on "in department." take your calls, emails and tweets, three hours on sunday live at noon eastern on book tv. >> this week on "the communicators," a discussion about the internet with rod beck strom -- beckstrom. >> this week, we are pleased to

have the president and c.e.o. of icam. start by explaining what ican. assigned names and numbers and four things that that we do, we set the global policies for 200 million internet domain names. all names have to be unique. we enforce that through our partners around the world. we keep the listing of all internet addresses or the allocation policies. so names, addresses and the system so the internet works when you type c c-span.org, that's called the domain name system and we coordinate that with different partners around the world. and we are the master repository for the internet standards that

are called parameters and protocols that hold the internet together. those are developed by engineers around the world through the internet engineering task force, but we are the official publisher of that. names, network addresses, domain name system and standards and protocols, some of the glue that keeps the internet together. >> how and when did it start? >> it was found nd 1998 and created by the u.s. government at the request of international countries and partners to spin these out of the government into a private sector multistake holder body. we are a nonprofit organization based in california, but our board of directors is very international. 16 out of the 22 are from around the world. very international although head quartered in the united states. >> how is it funded? >> we're funded by fees on the registration of domain names. when a registry dutch as a dot

com, dot org. that recommending industry pays us 25 cents per name per year and we get a registration fee like go daddy. when you go and register that domain that name 18 cents comes to us. we get our funding off the registration of domain names. >> so no government funding at this point? >> zero government funding. >> being the organization that your is there government oversight? >> there was some government oversight until october 1 where we published reviews to the u.s. government on a periodic basis. and that was done to make sure that we lived up to a standard of becoming this multistake holder group. when we formed 11 years ago,

there was only one commercial registry then and one registrar. we were supposed to have this echo system, there are 11 registries and over 900 recommending strars. we had to prove we could create the echo system. the u.s. government said fine, you accomplished that, now you should be accountable and transparent in how you help administer. >> joining us in the questioning is chris rose who is a technology reporter from the "wall street journal." he's in new york. your first question for rod beckstrom. >> i know that ican is going to this international domain name program where the domain name to the right of the dot will be in nonroman characters such as

chinese and so forth. why are you doing that now? >> the reason we're doing that, chris, you know when the internet initially got designed there was a discussion whether it should support international scripts ks that we think about english. at the time the engineers and this was about two decades decided to make it latin-only because there was not a standard for the other languages and scripts. the protocol that was sepped in 1973 got created around a latin script. people around the world say we want to write our own names in arabic or chinese. 11 years ago a researcher in switzerland came up with the idea let's interviews domain languages on top of that latin-based arc architecture.

there is a standard emerging called international domain name for applications which the engineers have developed and nine years of policy work later because there is a lot of subtle issues, we are ready to roll it out. two years of technical testing having these international domain names in the internet in what we call the root system. that has gone successfully so it's taken all those years, chris. but finally we are ready to begin rolling that out. we will start accepting applications in a few days here and put those in the mid-internet root. >> we hear that when the internet was created having the advantage of being english speakers and others around the world had the same advantage of using the internet and now with this going to the non-rom and

characters? but is something lost in the sense of the universe of the internet where we may start to get a more segmented internet, focused more individual countries rather than this more global forum? >> so from our stand point as westerners, it might seem fragmented but on the other hand interviewsing domain names so 300 million million chinese users will hold the internet unity together. there have been alternate routes to the internet or what we call the forking the root.

the interest in that is the inability to use their own native scripts. there will be proliferation of communities that we may not recognize but at the same time it will help the overall unity technically of the internet. it will be interesting to see. >> do you think on that point? do you think it will have a real practical effect in terms of how people use the internet or is it more of a cosmetic change or sort of a symbolic change where you're saying to the rest of the world, we see you and recognize that most of the users are udes of the u.s., so we're making this step for you, recognizing that. but in terms of the practical effect, creating more internet

users and so forth, you really think there will be much of a difference? >> we'll see. it will be a little bit of both. let's talk about the symbolism. this is really important to people. it is an issue of cultural pride that people want to be able to use this internet fully in their own languages. on the practical side if you are a housewife in korea or a businessman in china who only speaks chinese, your keyboard is laid out for korean or chinese. when you do your word processing you write in chinese and go to a domain name you have to flip your keyboard mode and work in a second language. that is inconvenient and little bit of a barrier. the other thing we have learned in some of the testing is that the biggest uptake of the international domain names is

small local businesses. it's not the big global brands that everyone knows in latin characters but the local restaurant or the park or the police station that has a local identity that people think of in chinese characters, for example, that they would never think of that police station or local restaurant in a latin character. so we'll see. chris, i would expect to see more proliferation in the smaller businesses and groups around the world. we'll see whether this is a pride issue or whether it really opens the flood gates for a lot of new domain names and sites. >> is there a security issue involved with opening this up? >> there are, peter. and any time you do anything on the internet, we tend to use open standards in opening it up. most people are good, so they'll use the new open standards and the capabilities, some people are bad or very bad and take any

new technology, any new standard and find a way to use that whether to steal money or extort money. cyber crime is a really serious problem. and concerns around some of the security issues on international domain names is part of why it has taken nine years to develop the policies. a simple example would be in a script that the russians use, they have a letter that looks like our letter a but it's a different letter. if you allow someone to mix russian anding lish script in a name they could make it look like ebay when it really wasn't. so we have banned that. so an international domain names, the string has been in international characters to avoid what we call spoofing. when someone tries to make a

website to look like another website to get their password or steal money. international domain names has been designed to reduce security risks and fraud. there will be security issues with any new technology but it has been created in creation with law enforcement and other parties to try and at least minimize those impacts. where does ican's authority derive from? >> it derives from the community and the fact that we have recommending strars active, governments, 99 governments on our government advisory committee. we have private sector groups, privacy groups, everybody comes. there is probably somewhere between 10 and 20,000 people come and participate in these policies each year.

>> are there governments that don't recognize ican's authority. >> in general, i would say they accept its role because it is facilitating. there are some governments who might like to see that controlled by some other governmental body. we were very pleased, peter, when china just came and formally rejoined our government advisory committee just in june of this year. that was a big development. one of the few major countries that isn't at the table is russia and that's because of subtle legal issues and perhaps that is something that will change. >> does that prevent them from using the internet in anyway? >> they use it very actively and active in the stake holder processes and there is an expression of interest in international domain names.

the president got a briefing two days ago that's online of him being briefed by the minister of telecommunications on international domain names and how they intend to work on the cerillic alphabet. sometimes governments aren't used to private corporations and the nonprofits having an equal seat at the table. >> our guest is rod beckstrom, president of the internet corporation for assigned names and numbers, also known as icann. chris rhodes from the wall street cournl. next question. >> on the point that peter raised on the security side of this, this is an area you know well as well as cyber security for the department of homeland

defense. how big of an issue is that and that will be its role going forward playing a bigger part in cyber security area? >> it's a great question, what role are we going to play in cyber security. there are certain things we can do in cyber security and other things we cannot do. we are a bottom-up community-driven organization, so we have to be sensitive to the role that i.s.p. eye want us to be engaged. the piece we are charged with focusing on is the security of the domain name system, the system when we type in c-span.org into a browser itic vokes the system with the address. that is used hundreds of billions of times per day. it can be used by hackers in these attacks where people

install their malware and they can command them to do bad things. those systems leverage the domain name system because they have to move their control point and you shut down that domain address and network address. so we have a special focus on the domain name system. the other thing about icann is we have to be like switzerland. we have nothing to do with offense anywhere. we can focus on defense and remain as neutral as switzerland because we have 24 on 0 countries around the world, everything from u.s. to all the european partners to syria, iran, north korea, everyone has some presence on the internet and their relationship for their country code domains is with

icann so we work with everyone in the world. we have to stay neutral and we have to focus on security of the domain name system through and with our partners. it's a tricky game we have to play in staying in the middle. >> the computer viruses and other types of computer attacks are nothing new and have existed since the beginning of the internet but seems they are getting more sophisticated by the minute and just the power of these things going. what's your assessment of the state of where things are right now in terms of the level of this cyber activity, illegal activity, attacks and the ability of the good guys to fight against that? obvious it's an up and down situation, but what's your sense

of the current situation and how serious is this for using the internet as we know it? >> sure. well, it's a very serious issue, chris, as you point out. in the short-term, things have been getting worse. the trend line in the past 24 months has been many more viruses and more sophisticated bot net. and there is one that much of the world has been fighting now for a year. it is on at least three to five million machines. it hasn't been used for bad yet, but could be. and icann is trying to get 100 countries to join because of that virus. but in the short-term, chris, i think the bad guys are getting a bit of the upper hand. they are networking very well internationally. you are seeing some in europe

and linking to those in latin america. very sophisticated techniques, a lot of financial crimes taking place and this is a world class problem and one that can only be solved by better international cooperation between the parties. but as consumers, we have to be careful on our own machines and we should think twice before doing all of our banking online. you want to be really careful in how you approach. i do it with a separate machine that is only plugged for maybe two minutes a week to execute those transactions and other wise there aren't financial records on any other computers. the good news is with net books and pc's getting cheap, it's not a bad practice. what i'm trying to do is limit access people might have to my financial records. an alternative is to stop using online banking completely.

i'm not advocating that, but there are programs called key stroke loggers that can get loaded on your image by looking at one image or video and everyone has the ability to track your key stroke. they see you go to a banking website and capture your password and take your funds. >> people on their normal computers or remote compute r, has the danger increased? >> maybe my paranoia increased. when you work on those kinds of problems, you really get a sense and scale of activity and how widespread it can be. maybe i'm in the school of overrulely paranoid people or more away. i just think people should be

quite carbous. now the banks have been and the credit card companies have been very good to cover most of the customer losses that have come from this. one of my credit cards was just canceled, nothing i did. i was told that your credit card has been compromised, no explanation of how, where and why. my guess is someone broke into a credit card company. there is a lot of good work going on in industry and parties around around the world but cyber crime is a real thing and i would encourage people to use caution. good online program to get trained how not to get tricked. it is a game online to avoid certain web links and certain names that might come up. >> chris, next question for rod

beckstrom. >> the other big change that seems to be coming down the pipeline is this opening up the domain name process, meaning making it a lot easier to create new top-level domain names, the right to the dot such as dot com and.net. we will trade a whole host of possibilities, dot airport, dot car, whatever. as it relates to the security issue, some are worried that having this increase of domain names could make it a lot eatsier for the bad guys out there to trick people and do their bad things, what do you think about that? >> let me talk about some of the factors and give you my gut sense on it.

my gut sense, overall having top level domains will lead to more security and let me explain why because there are a lot of different factors. the new parties that createen eric top level domains, like dot airport, will have to agree to a certain set of security standards that previous domains did not have to. they have to use d.n.s. secured, secured domain name system so you know you are getting the web site. that is a higher security requirement. that's the current proposal. the program is still under development. they will have to support the new form of internet protocol version six which has further at try beauties that can be useful to security. and they have a contract with us where they are going to have to avoid certain practices that might have been able to do in

other domains. the country code domains with the country groups, we have no contracts. we have a working relationship, but for sovreignty issues, countries say we aren't going to sign a contract. over those country code domains of which there is roughly over 240, we don't have contracts. we can't develop security standards. it is totally optional. if we look at typo squatting, if you misspell a name, let's say you misspell some of those words dot com. in some cases, you will go to a site of a hostile party. that is called typo squatting, that won't be possible in a top level domain unless your browser isn't working properly.

when that request goes to the system, it will be reject bauds we earnt going to approve any application. we're going to do background checks on the individual officers of the company, we're going to look at the history of litigation of the companies, how many dispute they have had over domain names. we get to do a lot of quality control over the new offerings that we haven't been able to do historically. my gut sense is that consumers are not going to be that confused. by going directly to the name let's say c-span got a top level domain, they wouldn't go to c spanch, peter at c-span. so arguely there could be a high level security. at the same time, all these issues are complex and thieves and criminals will try to figure

out any system to create harm. so we will keep an eye on it. >> how did you get into this work? >> it's a long story. i was a high tech c.e.o. historically and started a company, took it public and sold it when i was fairly young and did different social service projects. i was in new york on 9/11 and my life changed that day and i stopped all my business. for three and a half years i built a network of c.e.o.'s to work on peace around middle east and that work led to insites of how networks worked we were studying al qaeda that led to a book called the starfish and spider." that got read by government leaders and got recrewsed to help the u.s. government.

did my job at the u.s. government for a while, missed my family and icann called me and they gave me a call and said, we got the perfect vob for you and all you have to do is move to l.a. i said i'm not moving to l.a. we came out with an understanding and allowed me to work out of palo alto. so the first being los angeles at ucla, so to stanford was the first connection of the internet 40 years ago, october of 1969. >> chris, one more question. icann is obviously a unique beast and you have been there now for four, five months or so.

what has been your biggest surprise either positive or negative since you have been there? >> the biggest surprise is just the massive volume of communications activity. the stake holder groups are generating -- our board folks were we have one every month, 350 pages of policy work and subtle issues. so massive amount of documents, thousands of people involved and the economic stakes are so massive and we're this tiny little nonprofit organization. we are only $60 million nonprofit which is tiny with this trillion dollar industry and billion dollar players all fighting over the economic outcomes of these policies. i guess what has surprised me is the power of these forces that are hitting the internet and us having that in the internet and how that's all coming together. i'm thrilled to be here.

>> and i don't mean to keep driving this point, how do you get that authority? what makes you keep that authority and do you foresee that an organization such as icann going out of business because of all these forces? >> no. they are coming to the table and getting more engaged. there are business concerns about the upside and downside. getting much more involved. no one ultimately has authority over the internet. it is the collaboration environment. if we're not doing our job at the end of the day or the chinese are upset or another party is upset, they can create their own internet route. the network tends to bring people back in, the benefit of being connected to the rest of the world, but our only authority really derives from the community of internet users and our partnerships with i.t.f. and all the players in the echo

system, we have a humble role to play. it's a small little role and we have to do our best to be a fair meeting place and to let the internet name and number space evolve. >> and finally, are you familiar with icannwatch.org, the organization that reports on what you do and not always positively? >> we have a lot of critics and that makes any multistake holder process fair and open. >> and there is traffic on what happened on october 1 and some constitutionality concerns and some sovreignty concerns. how do you address those? >> i'm not a lawyer. i'm more a business guy, technology guy, i'm not an attorney, there are subtle legal issues that some parties is have represented that they are concerned about sovreignty. the preponderance of our community is delighted with the

outcome on october 1 including attorneys around the world, they think it's a terrific thing. and it may have been written by someone i know who is articulate and intelligent critic and watcher of icann. so i think we need to consider that issue, but by and large the world has spoken and the world is very pleased with the commitment and more countries are coming to the table to engage. but there will always be criticism and that is a great thing. >> rod beckstrom is president of icann, chris, reporter from the "wall street journal." gentlemen, thank you. [captions copyright national cable satellite corp. 2009] [captioning performed by national captioning institute] >> coming up on c-span, a forum hosted by "the economist"

magazine. the first part covers product a technological innovation and then the environment and environmental issues in the new year. >> it's gone, you've lost it. you don't own it. you are trespassing and that hurts. my possessions are now in a storage bin. >> this week, leslie and andrew cockburn. sunday night at 8:00. >> now available, c-span's book "abraham lincoln another, a great read for any history buff, unique contemporary perspective from journalists scholars and

writers from his early years in the white house. "abraham lincoln." learn more at c-span.org/lincolnbook. >> now a look ahead to 2010 hosted by "the economist" magazine. we'll have four entrepreneurs, one who helped create the video game "guitar hero." this is just under an hour. >> sometimes, >> somebody's misfortune is your been position of being one of those lucky beneficiaries.

meanwhile, i did to spend time with four of my heroes. this is going to be a great treat for me and i hope it will be a great treat for you and the panelists. as we think about 2010, it is great to think about all the innovation that will be happening. >> these four people feel optimistic about the future. we have the author of technology and has a curve named after himself. dean didn't come here if we told

him to. it is the one thing that still needs to happen. and you are optimistic but talking to dean is amazing how many things he is grappling with as an inventor. duane is involved in one of the most interesting companies. it is changing the business world and changing the nonprofit world through partnership with the rockefeller foundation to solve some of the biggest problems. and lastly the co-founder of "guitar hero" which i know least of all these topics because i fear i was born slightly too early to really enjoy it. but i was playing wii over the weekend so hopefully i will get into your try and industry and

it is bigger than music and films together. and i ran into a bunch of hedge funders who are coming out with clever derivatives to sort of fund new games, which means it really has come of age. i'm going to ask each of our panelists what they are going to be doing in terms of innovation. rob, what's going to be your focus? >> we are here on relying on materials, enzymes in our laundry deterring ent. rough numbers, u.s. economy has reached 2% of g.d.p.

that's the size of mining but growing, 15% to 20% and mining isn't growing that fast, nothing growing that fast in the u.s. economy. we will begin to see more products that are derived from genetically modified, fuel, materials and in particular, i'm interested in the role of scale in biology. so the oil industry is enormous because it has to be enormous and requires large pipes, large ships, large refining capacity to produce things we use and 95% of the stuff we use is derived from petroleum. biological systems can go directly to those same kinds of high-level things from waste food, from assuming, et cetera, as resources and i have just joined the advisory board of a

company that is going to be introducing perfumes and flavorings that are derived from waste using ecosystems to produce those fine chemicals and i'm quite excited about the prospects for lower carbon, lower oil requirements, that sort of thing. been? were we be spending your time -- b dean, where will you be spending your time? >> >> we are building prosthetics and most cost effective to our system and whole host of medical products that i work on my day job that i can't talk about yet. my day job is still continuing to be primarily there to fund my

fantasies, which are supplying clean water in the developing world. and we are doing that for 100 people per box. we are working on point of use electrical generation. we have two villages in bangladesh. interestingly, we are now running one on -- derived from a biology logically modified bug and the oil industry, which requires that scale to work, if you guys will help continue to term waste, food and biomass into a form at that will be conducive to being a fuel, we are making small units. we started to do it to the four billion that don't have like that but the two billion people

who are worried about their grid and want a smart grid might find these boxes very convenient and we don't have to make your fuels like the oil that's now a fuel because that's -- why take a 21st century fuel and try to modify it to run a 19th century engine. we can burn fuel that you give us and most of all, my fantasy job has convinced the next generation of innovateors that you are going to need to solve the problems that are going to overwhelm us through our first program our not for profit that started 18 years ago with 2 companies that adopted 23 schools to get into a little competition because kids love competition with robotics. we had 85,000 scientists and engineers volunteering their

time to work with kids and 43 cities around the united states run throughout march madness and did our finals. we hope to be substantially larger this year. will the be solving next year? >> we >> we are focused in and out of the course of years, the world is galvanizing problems water problems, energy efficiency and corporations need to create jobs and products to market. there is an urgency for innovation. it's very easy to say this is a problem that just happens now and we are seeing a

crystalization. evolving that process like mass collaboration, collective intelligence, 2010 is the year that these things come to the forefront whether it is looking for a new manufacturing process for tuberculosis drugs in the third world or getting a new router technology out for a high technology company in silicon valley. we will see adoption of new kinds of innovation that are participate pa tower. inviting people to shall involved in those innovation programs. with the size and scale of problems and challenges in front of the world today, that's the only way some of these problems get attacked. and i would say what kinds of problems would our solvers see? we are beginning to see a real -- as these processes become adopted on a greater scale, we are seeing not just the technical problems but big

problems. we just ran a challenge and what are the right problems to be solved in water efficiency? we run problems -- explain -- someone posed a challenge on your website? >> we work with organizations running the gambit from proctor and gamble so there is an art and science in making a well-defined problem out of it people can engage with. if you ask the right question the right way, it's 90% of the solution. but we put it over the internet and invite people to solve those problems. today they work individually. you might have 100 individuals or organizations around the world trying to solve a challenge at the same time. one of the most exciting things we are doing is allow them to assemble in teams and they work

on better building materials in subsaharan africa or trying to afy materials. this is a dynamic area. we are getting people from all over the world working on those problems and we think that is part of the solution to a lot of the things in the world facing us today is getting 7 billion people working. >> us, 2010 is about going green. the entertainment industry is going through a change. we make a product and put out a disk and put it out in retail. in our case, would provide a peripheral that you have to physically picked up at the store and play.

if you look at the games that are being created today and becoming popular, you'll see that games are going on-line. a great example is it -- is that all the games in japan, it is all about going on line. today, most of the business is still in the packaged goods business. you're starting to see the emergence of face but gaining where you no longer have to go to the store to buy a game. you're seeing games like world war craft with over 11 million people playing and their subscribers to that and there is no physical good that they need to buy to be able to play that game.

i think that our businesses have to change. consumer behavior is starting to change today more accustomed to going to the store to buy their games. we're starting to see that changing we're seeing that accelerate very quickly. you have the shift from packaged to digital almost overnight. i do not know how long it will take for the gaming industry to happen, but i think you will see that evolution of the think it will be allowed to fester than people think. the first thing that we have to do is to get people connected. it is a very basic thing for people who play video consul games.

our number one challenge is to get everybody connected. for us, it is about a poll. people have to buy this game because -- it means they have to go out to buy some kind of equipment that will get my consul connected, but it has to be great game played as exciting enough to get people to play. for us, as an example, guitar hero has been releasing downloadable content for the last two years which are just double the will songs that you can buy to play the game. it is really about trying to figure out how we evolved and

how do we get consumers to want to connect online and then once they are there, how can we deliver an experience to them that will have them now pay for that feature. >> i want to stick with what you were doing. there is this trend throughout history that many new technologies have their adoption driven by fun of and to ask where you see your technology of fun going elsewhere and we look at the week. do you see the potential in socially acceptable areas? >> i do. i am not personally working on any of those, but i am intrigued by those. one of the great things about gaming is that the mechanics of

gaming are extremely engaging. you get people who want to come back and play with. a game like farm bill is on line and it is played on facebook. 40 million people log on to play that game. you look at the type of engagement that these games can bring to people, there is very little bit you can do. you take those mechanics and

have the you create things that are engaging. how do you take those gaming mechanics and apply them? >> the military is actually funding the development so that they can encourage and train the next generation of people who will eventually be in the military. it your teaching people what is like to be in certain environments if they are on the battlefield. another example of that is fitness, so that many people have probably heard of wii fit. the fascinating thing about that game is the fact that most people hate fitness.

it is just not fun. the majority of people find it not fun. how you create an experience that people actually want to do. -- want to do? it is creating that experience that is creative and fun and it gets them to do an activity that they normally would not want to do. another interesting example is in the medical field, where doctors are performing surgery by robots and the doctors now control the surgery's through a couple of joysticks. they find that a video game mimics that. it is all about these little meinecke movements the your controlling while watching the

screen. they discovered that that is a fantastic way to train doctors to do these types of surgeries. and there is a tremendous amount of applications that we have learned about engaging users. you have given me and nesting nightmare image of the future of the industrial complex where someone -- all of these things are possible. >> you talk about the innovation process being about to go through a new phase of productivity increase. what is it about next year that makes that a turning point here? is that something you have learned over the past few years? >> there are a few things that

have converged. the unable month of the internet to create a way to communicate effectively is incredibly important. those things have created an in fertile atmosphere. they have become industrial strength solutions. the second is social networking. the trust systems are evolving. the third is a work system that is involved. this is the free agent nation. they create a new kind of

innovation. i think that the last is this the emergence -- there is this emergence of a crowd sourcing as illegitimate government will tool. you have to give people -- good people all over the world talking about what they care about. these are forms of group structuring. make this a possibility, now in a way that it is -- it has not been in the past. whether it is looking at capitalistic terms, or the fact that companies need to continue

to innovate, did not for -- not for profit still has the disease to treat. a crisis is a terrible thing to waste. this shatters the model of the last hundred years. >> >> i suppose you look at this health care debate that's going on in america and the thing that everyone is i guess is really worried about is what we get is further cost escalation without much improvement in health outcomes from a political point of view. when you look at the scientific possibilities whether it be the use of month bile phone technology or health care or the things you are talking about,

there is a different picture that you can paint in terms of better health outcomes and lower costs at the same time. but that doesn't seem to be happening. is it going to start happening? what are the changes that need to be put in place to make this technological dream a reality? >> i'm not an economist or a policy person, but i will tell you listening to this never-ending debate between those who are polarizing everybody, it is astounding to me one part of all their well-thought analysis, 4.2% growth, for 30 years and then we are all bankrupt, where in that great debate do they embrace the one part at least to me, i'm

biased, one part of this human experiment called innovation and technology which always saves the day? i can imagine if all the people involved in this debate were having the debate in 1920 having health care costs getting out of control, they would say we came out of thihi polio epidemic but we built iron lungs, but they could have predicted by the 1950's that half of the people would take care of the other half and lying down inside a gipet drum oh, something might have affected that great analysis, they didn't know that salk would come along and vaccination and polio is gone and small pox. today, for instance, they have this great set of predictions about the crisis and the costs

of health care in 20, 30 years, but today in the united states, 30% of all reimbursement is directly or indirectly related to diabetes. the acute condition and insulin shock or the long-term effects almost everybody that is on dialysis, long-term is because they spend too many years or decades as a difficult bet he can or people are 17 -- diabetic, but does anybody believe that 30 years from today, people are going to be getting diabetes? right now it's an epidemic. kids are obese. maybe i'm the optimist. it is inconceivable to me that 30 years from today just as we wiped out other diseases and if you wipe out one, it will be

wiped out. . . and where is the debate about forei research into wiping out the cancer, alzheimer's and diabetes. >> are you talking about having some kind of manhattan project mentality on these areas? >> when we get serious about solving problems, we solve them. it is time to get serious. the technology is right around the corner it will not only give everybody a way healthy lifestyle, it will give us -- it will be more cost-effective.

this is the consequence of wiping out that which we are worried about. >> please, be getting some ideas to through to our panelists. you talk about the biofuels possibility. we were talking yesterday about the potential for the food crisis to be solved through technology. we rented pad gives the other week about [unintelligible] the basic calculation is that by 2015, the world will have to produce twice as much food. his biology going to be the answer to that crisis? >> if you are asking whether by

eligible provide as food, i'll have to say yes. i wodon't know where else we would get it. i think that the answer is mostly land use is going to play a bigger role. water usage will play a big role. 7% of the world's fresh water resources sees this falling. i am not want to say there are bigger issues -- i am not going to say that there are bigger issues. they have to change the way that they use water in their economy. that holds true in the u.s. as well.

we do not as a surly use it as intelligently as we could, -- we do not necessarily use it as intelligently as the could. i think we will have these drug into corn forests and change the route system of corn. the amount of resources does not really concern me so much. whether we are a bit more clever, if we had all the available, and we're still relying on oil for heating and transportation and if you believe that carbon is

important in warming, if we have all that food available and we're still producing lots of energy and materials from oil, very rapidly, our kropp goes to hell -- our crop goes to hell. >> to raise an interesting thought for me. i come from britain where there has still been been as successful trial of a genetically modified crop because the protesters have trashed the field every time. will this go to china were indifferent -- where a different the approach would play out?

>> of want to be able to follow what is going on. we can read and write dna with increasing ease. the feature of that is that now, students participating in a competition the design new organisms and try to pull pieces of the shelf to snap together. i am fortunate to be a judge for this. i am amazed every year of what the students come up with. the last four years for cambridge, the year before the it was in beijing pennsylvania was the year before that.

-- was in beijing, and sylvania was the year before that. the natural question is if they can build pathogens? the answer that usually give is that, yes, you should be worried, but there is nothing you can do about it. we also have to be paying attention to who is using and how they are using it. as is naturally the response in this town in particular, they want to regulate that technology.

they will derive that by 2020. the world has changed and innovation has changed. the sickbed of biology, playing with these genes has created an incentive to design dna sequences from scratch. that is the world that we leave it -- that we live them. -- that we leap -- that we live in. >> i want to say that i am a great fan. i read a piece that said that was the city was the mother of

invention. actually, it is the opposite. i want to ask the panel if you agree with that. has that equation shifted? >> you first. >> no, i want to prevent a gasbag answer. is the question is should we be focusing on anything other than the critical technologies that relate to whether it is food and water and energy around the world? was up the question? -- was that the question? >> not necessarily. >> if the question is -- i think

what the world is finally coming to deal with the fact that we are in a race between catastrophe on a global scale in many dimensions we're in a race between catastrophe in an education in general. if it can continue to stay one step ahead of catastrophe, it will move. the result was a dark side. the first guy that figured out how to make a flame was popular but in a bird bath house. it could be used as a weapon.

around the world, whether we like it or not, be -- we are reducing the size and scale of an organization that needs to be put together to have a dramatic impact on the world. a few kids in a basement somewhere to make this pathogen. so, we are in a race that requires that we develop better technologies faster and deploy them more responsibly and i think that the only way we will do that is to educate the next generation way better and we faster. you only needed a few people and worker bees. now, to have a meaningful career, everybody has to participate. 7 billion people cannot be recipients. they have to be part of the solution and that is when to

require an advanced technologies to be properly developed. that requires education. >> we have another question. to stand here. -- just stand here. >> i work for the intimate corp. four numbers. do you think our current intellectual rights regime is going to help us with innovation? at its worst, it to be a the keeper -- it can be a gate keeper. is ipr or to help us for will be a hindrance? >> i am certainly looking at the u.s..

i did not think it is on -- any other statement that it is broken in dated at the very least. my view is that the system this setup today, we are probably a sign up to protect industries that made massive capital investments, but as it was said, we have too much work to do i do not know how many people noticed, but if for some sign of all patents will fail. you put in place a system that does not accelerate innovation. maybe it did 50 years ago, but today, it dramatically dampens innovation in favor of business models that are protected more than they should be use.

>> i am partial responsible for him, giving the term open source biology. -- for promulgating the term open source biology. there is a lot about software that makes open source work. my company was started in my garage to test the idea that i could order jeans over the internet and still innovate on a small scale in my house. this is possible in my house. the patent that i applied for in

order to engage in any kind of market as cost several times what the actual inhalation cost. buying molecules and moving them around really does not add up to much. it is all up paying for the patent. that is a huge barrier to tried to engage in the marketplace. mashal -- the challenge in biotech is that each team has a patent on it. it could be something that they actually invented. there were bits and pieces of many different genes. it is still incredibly expensive. if i had 10 of those semi product, it would be 10 times more.

this is already standing in the way of innovation for me or anybody who wants to play with jeans -- jeans -- genes. if sars 2.0 show is up, there is still no vaccine for it. -- shows up, there is still no vaccine for it. when it shows up, what is the innovation structured or to look like to build a vaccine for the bug, given that the thing that we have already face has yet to have a vaccine ready for it. we're in the middle of the crisis, it will be hard to fix that innovation structure on the

fly. we need to be thinking ahead much more that we are today. >> several of the founding fathers were opposed -- >> what would help us respond quickly? >> the question is, the reason for it that ms. to guarantee investment. why would i build something new of someone in china can make it better, faster and cheaper ones i have done the work and -- but that idea of protecting some sort of property right is

widespread. we could decide that we protected dna with something other than patents. i would think a fantastic policy in the session. in the end, i would say that i would find out. i do not have a great answer for that. >> does anybody have a solution to the problem? >> talk about a complex topic, i think that patents are too long. there should be an ocean of the frivolous patent. i'll also say that if you're going to apply for a patent, particularly in the area of public health, it should be -- it should expire. there is a vehicle for taking open source ideas and making the

available so that they can be used, but that whole area is just now being developed. . . this could not have been in the minds of the founding fathers when they rose a single sentence that exclusive rights to the inventors and authors.

never has the world in in more need of desperate innovation. this whole stimulus package is nothing compared to the people being incentivized to solve problems. there needs to be big changes. my fear is that in the process of trying to change this for the convenience of some currently powerful industries, the unintended consequence of what is now being viewed as a reform of the patent system could lead it neutered and it would be a terrible thing to remove the incentive. a terrible thing that he will

not see until the next generation goes through. >> i could listen to you with the rest of the day, the rest of the week. need to ask each of you for your prediction and hopefully it is an optimistic. >> we have a temporary reprieve from the high food prices that we have seen from 2006-2007 because the economy has backed off. we have some space between it resource production and resources . the consensus seems to be here that economic growth will come

back next year, maybe slowly but it will be there. my prediction is that we will see a return to higher prices because we will run up against our production limits very soon. food prices, the oil prices, etc.. >> thanks for that. >> i'm not sure that i can do 10 words but my theme is still education, particularly about innovation. i will give you a quote from a political leader. i think that i will get the whole thing right but all of those that have meditated on the art of governing mankind and the fate of empires depends on

education. was that obama? was that bush, was that clinton? it was aristotle. there is not a lot of new news here,'s. -- there's not a lot of news. we need to get the government understanding that technology. >> what is the prediction? >> my prediction is that the public is becoming more empowered and more educated. innovation would become faster and more easily acceptable

because of the crisis that we have and that is a good thing. my prediction is that things will get better. >> i think there has been a national and global debate for years and it has been a slightly ta different debate about the innovation strategies and policies. too many people are out of work today. i think that there are too many diseases than me to be cured. in 2010, one or more countries start driving a real reform and the technology policy that addresses jobs, technology, education. >> one country will start to lead? >> someone has to. >> this is serious stuff and all i do is play games. there is a transformation from a

packaged goods business to a digital business. if you look at what is happening onside of our direct area where if you look at asia where this model has already happened and they will never move back into the type of business that we see here today and in europe. if you look at iphone gaming, this is the number one category of applications on the iphone and the most of them are free. we have seen an evolution from purchasing games at a high premium and then it moves in to where it is free. you get the user to pay for some engage but that they want to pay. as the game industry transforms from packaged to digital coming gaming will eventually go free.

>> >> in this next panel a look at what could be the driving factors in the economies in 2010. we will here from austin gool y goolsby, and carmen reinhart. this is just under an hour. obama cil on economic adviser. this is just under one hour. >> now that the world has emerged from the deepest post-war recession what will the recovery look like in the u.s.

and the rest of the world and what are the risks? the recovery so far has been pretty much propped up by government, by low interest rates and government stimulus. what happens as we try to exit that which we will probably begin some time in 2010. do we risk sovereign debt crisis? is dubai last week or the week before a wake-up call? what will asset markets do? we have had a tear on wall street this year. what happens next year? do we physical the risk of bubbles? what happens when they burst? those are the questions i want to talk about. we will talk a few minutes then open it up to you and we will end the morning with some predictions. some very concrete predictions from the two of you i hope. i have two terrific panelists. their bios are in your packet.

austin goolsby is a member of president obama's council on economic advisors and staff director and chief economist of the economic recovery advisory board, which is chaired by paul volcker. austin is on leave from the university of chicago where he is a professor of economics. on his left, carmen reinhart professor of economics and director of the center of economics at university of maryland. she has had a very illustrious career and i would say it is probably one of the u.s. experts on crisis analysis. illustrious career and it is one -- she is one of the experts on crisis analysis. how workers have been at the cutting edge but for more than a decade. much of this work has been

together in an absolutely spectacular new book which is one of the best performing the government books of all time called "this time is different, 8 decades of financial falling tholly." alston, let's start with you. you arenw&x#ñ always optimistic. -- austin, let's start with you. you are always optimistic. where are you on the shape, what kind of letter would you assign to the shape of the u.s. economy and give us a flavor of what next year will look like for the u.s. >> i'm back to ph.d. time and i have one of those greek letters

in mind and it is librake psi o chi. we have been up, down, sideways, indifferent. i think the trend is clearly in the right direction. and remember at the beginning of the year they jumped all over the administration and the chair of the c.e.a. for saying that she thought we would see positive g.d.p. growth by the end of 2009. they said that is a totally rosy idea. we will have had positive growth for half the year. i think the question -- and i don't know the answer to it -- that it is a much better question than when will the recession end is when does the traditional lag come to an end

between when the g.d.p. turns around and when job growth begins and how much of the recovery of 2010 is going to be reined in by some of the credit crunch factors that carmen talks about in her book, that we might grow but we might reach some peak that is far less than what we could be. i think the beginning of 2010 will be better what people have been thinking of. >> so, the third quarter of 2009 was 2.8% growth, fourth quarter something like that. we will be looking at reasonably robust growth? >> 3% is reasonably robust and i would say we are at least going

to be in that range for all of 2010. >> what about you, carmen? what is your view? let's start with the u.s.? i think that we will be in the same range for all of 2010. >> what do you think, carmen? >> hopefully it is not an "l." i think all of the indications point that we have reached a bottom. the question is how strong the recovery will be. i do not think that the v-shape, when it was going through the 1982 recession, i was at bear stearns, of all places. that was paying v-shaped recovery and we had a lot of reasons to expect that real interest rates were very high,

the highest since the depression. we had a lot of room on monetary policy. we did not have the leverage situation in households or with banks. for those reasons, interest rates that are near zero, i'm expecting this recovery to be sub-par. not just in the u.s. but elsewhere. >> there are some very powerful forces skull lying in this -- there are some very powerful forces at play in this recovery. you tend to have some weak and fragile recoveries after that. i think of this as a backwards square root.

you go down fast, you come off quite fast and then you love all of the very quickly. how different are things this time, carmen? are there things in this crisis, in the u.s. situation that leads you to believe that we will have a different trajectory? >> well, i will do good news, bad news. the goodness is that the policy stimulus is more aggressive than we have seen in any prior crisis. the past to be worth a bit. the bad news is that this is a global crisis. we have not seen anything this synchronous across the largest

economies in the world. we've not seen something like this since the 30's. if you look at the postwar recovery from crises, from deep financial crisis, one of the factors that kicks in importantly is export growth. it kicks in because you had a currency crash usually in the year of the crisis. it also happens because you are in crisis and the rest of the world is not. the average growth in a postwar crisis situation which is 10% export growth annually, we will not connect that to help us pull out. that is a downside to the recovery. >> will start with the observation that traditionally

economies have helped their way out of post banking crisis situations with export growth how much it is or rosy projection to a point on rapid growth. >> we can have robust growth in trade in general just to get back to some normal level. it will be up and then flat. the flat as at 3 and 1/2% growth, i have no problem with that. >> new york talking about a growth rate, not a level, so it goes down and up and then

instead of continuing and going up up, if it comes up to three and a half percent and we stay there, that is not a traditional shape of 1983, '84 that had 7 or 8% gdp growth for one year. if we are in some stable robust growth that is not based on asset price bubbles but more based on business investment, some export growth. in a world we cannot totally reliant on 12%, 10% growth, the u.s. does relatively well in that environment. we have always had less dependence on international trade than virtually anyone else. the wesu.s. is the biggest markt

for the man credited in this market. -- for demand created in this market. robust business investment, consumption growth that is proportional to the income growth. we can have sustainable growth without having to go back to household balance sheets where the savings rate is literally less than zero and several quarters of the 2000's. the stage is set where you can easily see the road for the moderate growth rate scenario. it is hard to see what the road is to super growth. in some sense, that is ok. we were facing down a horrendous

scenario. tical -- people talk about getting to the bottom of the recession because you will not turn around and gdp growth for at least a year. we are out of recovery. >> let's talk about the other aspect, there has been huge government stimulus. we are running a double-digit deficit. and we see an average prediction at 9% gdp. the debt will be higher across the rich world than when the crisis started. carmen, one of the most stunning statistics in your book is that public debt tends to rise in 80%

in real terms after this kind of crisis. how much do you worry about that being repeated? how much do you care about the rise in public indebtedness here. will this restraint the recovery that austin is talking about? how much should we worry about the scale of the budget deficit and that the buildup in debt? >> well, i have lewis thought that we should worry about getting out of the whole we have been in before we worry about medium-term issues. we want to make sure that the recovery is solid, even if it is

not robust, we want to make sure it does not to the same thing that happened in japan and the mid 1990's. the case for stimulus is there and that is something that i will come back to later. the consequences of height that concerns me. it concerns me about that overhangs which do bad things to growth, for example. if you look at the 80% figure, that is over three years. we are on track to come very close to the experience. the u.k. as well. ireland is ahead of the curve. spain, all the countries that have had financial crises.

we have seen a dramatic increase in indebtedness. >> one of the big debates will be when it should you start at the exit strategy from loose fiscal policy. ireland's budget deficit has already been cut. they are raising taxes and cutting spending. the logic in the u.k. is that in means to be done fast because otherwise investors will freak out. do you think that it is right that policymakers should be thinking about tightening fiscal policy? >> thinking about it, yes, acting on it, no. that is in a nutshell. thinking about it is critical. it is important to have in place

for having confidence and to avoid risk considerations getting out of habit. one of the lessons that we should be taking away from the 1930's is that declaring victory too early can be costly. that was also the japanese in 1997. >> thinkin the president said there was a need to focus on the rising debt. >> i don't think that those are contradictory. i think that what carman has said is exactly right.

there are people that are just getting confused. in the middltail end of the deet recession since 1929, you do not tighten the belt of that moment. that is incorrect. if you did that that is extremely dangerous. there is a zero connection to the current crisis. the long run problem face being the country is the same one that has been facing us the last 25 years. the aging of population and growth of healthcare costs. those are the dominant things that affect our fiscal position. >> in the long run. the lesson of carmen's book is there is a consequence. >> there is. we are running a deficit for two to three years. if you think of the stimulus

plus balance sheet of fed, that stuff is not affecting the budget window is a 10-year window in the u.s. if you look in the 10th year, the deficit is substantially, is forecast to be substantially worse than it was two years ago. and if you ask why is that the case, part of that is the way we do the forecast, it has the feature that in boom times the 10-year deficits come in way better than expected. that is what happened at the end of the 1990's. also in the mid 2000's. that deteriorates when economic conditions get worse. so, part of that you kind of want to get into a more steady-state scenario before you can askç the longer-term pictu. theç second is this under lyly- the main fiscal challenge facing the country is not paying for

the stimulus. the stimulus is almost totally out of the deficit by the time we are five years from now. >> carmen is shaking her head. >> the additional interest, you will have additional interest that is a very small component of the deficit. $50 billion a kwraoyear, where long-run deficits are $400 million or $500 million a year worse. there are critics of the administration saying somehow the obama social i wases are spending the country into oblivion but i defy you to find a program that is increasing the deficit because that is not occurring. into any program that is increasing the deficit. >> i have to object to that strongly. one of the points that we have been making consistently is that even if there is zero stimulus,

the consequences of financial crisis are very difficult for the budget because revenues collapse. even if you have no stimulus, you have very serious budget consequences because revenues from property, income taxes, any sort, this weakened substantially. i think that the the the issues have brought forward the issues that you raised. there are aging population, social security. that has been brought forward because of the financial crisis. not necessarily because of the stimulus. >> i will move on. i think that we can all agree that you both said that it would be wrong to tighten fiscal policy next year but we need to

worry about the medium term. there are long-term problems from entitlements and that the recession has made that worse. i want to get a couple of more subjects in. one is asset bobbles. six months ago, the whole debate was about policy makers needed to steer between deflation on one hand. we have a lot of talk that even as we can't have very much inflation, we have asset prices, i am looking quite frosty in the u.s. and in asia, particularly, how much is next year, will it be committed by worries about asset prices. what should it be? -- will it be made worse by

asset prices? >> with uncertainty about the strength of the recovery and, monetary policy is going to be dominated by concerns of asset bubbles as the main driver of policy decisions. right now, more money has been lost searching for high yields. we have a lot of search for higher yields in the emerging markets. many have acted to try to dampen that and i think there are concerns about asset price bubbles. i don't think that u.s. monetary

policy, if that is the question, if that is primarily reacting to that. it will remain focused on asset conditions. >> this is a formula of what should the rule of thumb, the monetary policy should depend upon conditions. you plug in the formula. right now, says the interest rate should be - 6%. this is not the time to be talking about an exit strategy. that is the time for the fed to be talking about raising rates or doing something to pop asset bobbles. -- obubbles.

they might face a difficult issues like you are trying to figure out if you are in a bubble. >> do you think are any signs of a bubble here? >> it is hard to tell when you are in one. if you have this in addition to huge leverage, we have seen that go wrong time and time again. we are in a time of the leveraging in the u.s.. people can argue about whether there is an asset bubble or not, we are doing the right thing in getting this out of the market right away. you have places where there is high leverage and commodity prices shooting through the

roof. >> one big topic that people are concerned about is the dollar and the dollar's role as a reserve currency. do you think that is a question that people should be worried about? will there be more concerned about the dollar? >> is hard to see how there would not be. if the dollar will be replaced by other currency, what currency is it.

if you look at history, the writing was on the wall that if the pound was to be displaced, that was by the dollar. that natural succession has not been determined. >> will it be the euro? >> we don't have a unified treasury market for euro. people don't buy your wrote or dollars, they buy government securities. -- people the purchase euros or dollars. you don't want to buy greek debt. i don't see the euro as having a unified market that is competing with the treasury market. >> the u.s. dollar policy is

determined by the u.s. treasury and i have no comment. whenever you see any announcement that sparks fear in the marketplace, unheard people run to the u.s. dollar. the idea that people cannot see the u.s. government has a column in the middle of a star has been disproven. >> -- a calm in the middle of a storm has been disapproving. >> last friday's jobs figures, the unemployment rate fell. i would submit that we are going to have an uncomfortably high unemployment next year. we have midterm elections coming up in november.

it is not a particularly pleasant number for any administration. there are two things which one can worry about. to what extent does this put pressure on the administration to come up with policies to deal with this? there's also the risk of protectionism. something i have long worried about in this whole crisis and frankly i have been surprised how little there has to insofar. if you have an environment of relatively weak growth by historic standards and unemployment, shouldn't we be worried about this being the clear ingredients for rising trade tensions? >> you are always trying to scare me i have not seen any of this massive rise in anti trade

sentiment. unlike any previous recessions where there is a nasty rise in anti-immigrant sentiment, night to the issues of trade or immigration have become central in this economic debate. -- neither of those issues of trade or immigration have become central in this economic debate. the job market is basically correct, even in a normal recession. it takes a lag between when the gdp turns around. this is usually before it affects unemployment. it goes in the order of gdp growth, then productivity growth, then hours of existing employees go up and then payroll employment. the good news is that the gdp growth appears to be around.

this past jobs report you sought hours of the employed start to pick up and down maybe we will see payroll employment growth. this was much worse than a normal recession. the unemployment rate could be going up even when you're generating jobs. the unemployment rate may still go back up even as it improves. how much do you think that the american people are just being driven by the current today or how much did they take a step back and have understanding that to this was a really tough spot. a lot of economists look at the last quarter and say that we've

really were that close to the depression. the financial system goes down and we are not on a self correcting past. -- path. if the unemployment rate is not down, i would hope that people would understand that we took on what actions that many of which were not popular and they continue to be popular now by saving the financial system. >> when you look at the political economy, does that give you any insights into

thinking about what things would look like here over the next year or two. -- over the next year or two? >> no, unless -- the only patterns that emerge from the political side are very clear are those extreme cases where you have had a sovereign default in which any adm remember our sample of crises are drawn from very hybrid political systems and very different stages of being into a particular administration, so it really is not -- on the political arena, the one general theme that we can point to, which has political implications, is seldom does growth bail you out in terms of

the debt accumulation. so, -- i shouldn't say you can but it is not the -- the odds don't favor that you will grow -- whichever administration is in place post-crisis is going to -- >> have to deal with it. i see that the clock is tick in so i'm tkpwg going to stop and there are any questions. the gentleman right here four or five rows back and there will be somebody with a microphone. >> thanks a lot. i wanted to ask what impact do you think the continuing u.s. military interventions in afghanistan will have on the u.s. economy, whether the effect on government expenditure will be offset for revenues for u.s.

companies for defense contracting and the military industrial complex basically? >> i haven't seen the exact budget numbers, but the incremental cost of the change in strategy for afghanistan, i don't think it is going to be -- it is material, but it is not anything like a big chunk of the u.s. budget. and i wouldn't think it would have a big impact on economic growth or the recovery. >> down here. . >> i think that the balance is

off. i think that you are forgetting the most important thing is people. people go within themselves. i think that we should think about the money. >> can we restrict this primarily to questions, please? >> one of the things that we are seeing, there are a lot of people suffering.

what can we do in the country to get back in the long term? how can other sectors help you? >> the goal in the stimulus and the goal of what the president and

administration have been saying so far is if you are going to do jobs programs you want to do something where you can -- partly because the fiscal position, but partly because it is more sustainable -- you want to do things where the government can incentivize the private sector to stand up than straight government programs and government employment. i think an area of concern to me -- and i wonder if carmen agrees -- in the u.s. at least, coming out of recessions small business has historically been where the rubber hits the road and in a recession they are the first hit and in recoveries they are the first to come back because the credit conditions are what they are and basics are particularly weak and they are the d disproportionate source of funding for mall businesses there is the risk in this

recovery that engine is not functioning. we had this jobs forum this past week and a bunch of the c.e.o.'s of the biggest companies i said what is your biggest fear and it was that small business can't get any credit so our suppliers will be in a terrible spot by 2011 and what are we going to do because that will hinder our own expansion. so one answer is direct job growth policies which i think we should be engaged in and you have seen the president talking about. but we have to crack this nut of mall business lending. >> i think that one area where we can do better is to plain the length between employment, mall business, credit availability and, yes, tarp. one area where i think a lot more work needs to be done is to

lighten the toxic asset load of financial institutions, more aggressive write-downs of bad loans. that is ultimately important for employment because -- and rightfully mall businesses are very dependent on bank credit -- and households, and the real estate market at large also is dependent on credit. and construction activity is very employment intensive. so getting the credit channel activity should be a very important priority beyond fiscal stimulus, a priority in getting employment growth. >> so get it cleaned up. >> a couple more questions and then -- that gentleman there

with the scarf. >> in the past month there's been a lot of traction, as opposed to a tobin tax on financial transactions. paul krugman and others have proposed this is something that all financial markets across the world do to hedge risk. do you think this is a prudent thing to do right now? and what do you think of the future of the tobin tax? >> good idea and will it happen? >> let me say this. the tobin tax has a lot of commonality of the loch ness monster. just when you think the proposal has disappeared, it raises the head. and these proposals have been batting around for a long time. and one of the things for a tobin tax to work it has to be

globally orchestrated or it will only create diversion from one market to another. and it is difficult to actually see the political wherewithal, especially in the u.s. and u.k. hose two derive more of their income from the financial industry than the rest of europe or other countries. so that getting agreement on something on the scale of a global tobin tax, i don't attach a lot of feasibility. i will conclude my remark by saying that, yes, it was the case, no doubt, that in the post-world war ii period where we had fewer financial crises you had a highly regulated global financial flow. but we got to that after two world wars and a great depression. so, turning the clock back from the era of high capital mobility

took two world wars and a great depression. we are not there. >> will it happen? >> first, it is clear it would have to be done by everybody. and don't overlook -- there are a whole bunch of -- i don't know if it would be singapore or whoever wants to be a financial center and everybody else will tax your transaction but we won't so move all of your stuff here. tobin himself was my advisor when i was an undergraduate and kind of my hero and mentor. tobacco,himself would often say well i don't know if it exactly could work. because everybody has to do it together. the second thing i would say it is clearly getting at don't we need a stronger regulatory environment where that is

serving -- tobin tax is serving as a proxy or don't we need more tougher, tighter more robust oversight. obviously we do and that has to be done internationally for the same reason so that there is not one place and everybody shifts their money to that. there are things that are equally important in that but i don't think anything is more important than that. we have to have tighter and more robust oversight of the financial system. >> no more questions? i was going to say am i allowed to go over. i have to ask both of you for some predictions, some concrete predictions for 2010 which will then be written up on the screen behind you in a succinct form. i would like two from each you. one optimistic and one pessimistic. so where we will be surprised on the up side and one where we

should worry. carmen let's start with your optimistic. what will be better than we thought in 2010? >> the good news is it is not 2008. that says a lot. the good news is that the questions that we are framing or how strong the recovery as opposed to how big a collapse, which is where we were not that long ago. >> so a recovery but not another collapse? >> exactly. the bad news, i think there is still too much for my taste complacency that everything is on track, that i think there are concerns about the durability of the recovery in the advanced economies and the d-word in the emerging markets, default. we had a little bit of a preview with dubai, but if you look at latin america and asian economies emerging markets they

delevered a lot but if you look at eastern europe and former republics there are causes for real concerns just whether this assumption that emerging markets have weathered the storm. >> and there will be defaults in emerging markets? >> yes. >> will there be defaults in rich countries? >> i doubt it. >> austin, what is your -- >> the good and the bad? >> the good and the bad. mine has a twist of good and bad. the good is there will be little sign of up turn in inflation in 2010. >> there will be no inflation? >> there will be no upturn, which is good but that is a different way of saying there is not going to be humongous growth, you know, 10%, v-shaped. >> there won't be 10% growth. >> my prediction that they can

write down there will be no upturn of inflation in 2010. the negative prediction is productivity growth will come back down to some normal growth rate. we have had productivity 5% to 9%. it will come back to something more normal like 2% to 3%. that is bad because ultimately our standard of living is determined by our productivity growth. but in the short run it has the positive feature that that has been one of the things really negatively affecting job growth in the country has been output is growing at one level and productivity growing faster than output. so if productivity goes back to something normal job growth can be more robust per unit of output. >> so, firms won't be able to

push their workers much further. >> right. >> thank you both indeed. [captions copyright national cable satellite corp. 2009] [captioning performed by national captioning institute] >> today an encore presentation from the supreme court special. it is an interview with clerk william suitor on his job and how the court picks cases. that is 7:00 p.m. eastern on c-span. >> fox news kreutor michelle malkin is our guest on "in

depth." the author takes your calls, e-mails and tweets. three hours with michelle malkin sunday at noon eastern on book tv. >> now part of a forum hosted by the economist magazine looking ahead to 2010. in this segment four activists discuss climate change an u.s. environmental policy: >> ladies and gentlemen, please welcome our guests. [applause] >> good morning >. what a pleasure it is with you to discuss the very small topic of the grand challenges we have

beginning in 2010. this panel will describe everything you need to know about the future of the world economy, climate ching, urbanization, global health threats. we will leave it to the next panel to deal with the solutions. urbanization, global health threats. we will leave it to the next panel to deal with the solutions. i would argue that we are entering a new age of unprecedented global threats.

you may say well, welcome to the party, we have been there since 9/11. but in this new century i would argue that the global threats we have been most focused on, the most urgent global concerns, terrorism and geopolitical threats and the financial crisis and response of developing a new economic order, not the ones we will be principally judge on from the perspective of 2050 or 2100. they are essential but in nature they are not unprecedented. terrorism has been with us as long as history books have been with us. and if you talk about financial crisis it goes hand in hand with capitalism. we just need to look at the tulip bubbles of centuries ago. so they are not different in nature though they are essential to deal w. we are, however, confronted with self megatrends that do posit a new challenge that might require new kinds of

responses. perhaps new institutions or arrangements at the international level. perhaps the solutions will be from bottom up or national governments or the market. we will find out from our panel what they think. among them, of course, first climate and related ecosystem challenges. we will talk about them in a moment as the world leaders including president obama are soon to garrett for the u.n. summit. if you talk about global health in an age of increasing interconnectedness whether the pandemics that we are in the midst of with h1n1, but also the threats that come a little more silently. the chronic diseases that arise silently from a sicker, fatter and older world and the kind of challenges that that poses to our health system and economic

systems. the third challenge i would put forward is urbanization. we are for the first time in human history a primarily urban species. this is going to be a trend that continues aggressively the next couple of decades on ever forecast. we will be a predominantly urban species and most of the cities where we will be living have names you don't know. we know about shanghai, beijing but the 100 other cities with more than a million there will be very few people that could name them not to mention the cities right behind them in brazil, south africa or india. will they develop in a leap-frogging manner to the greenest potential or repeat a lot of failed policies of the past? if so it would make the challenges we face more difficult or perhaps impossible to master. taking together i would argue these are going to be the

challenges we will be judged on as prosperity comes on us with china, india, the rich economies rising in one generation, something bigger than anything we have seen since the arrival of columbus and the europeans in the new world. this is an extraordinary event in terms of poverty alleviation, trade and opportunity for all of us but it is a forcing factor making all of the other sustainability challenges all the more difficult to tackle and may require new approaches. to help us think about this let me turn first to climate. that is an area of your expertise. do you think that international approaches -- global governance on display in copenhagen -- offers the best chance for tackling such a problem in they were offering the best chance to deal with the climate and ecosystems. >> be we need to be able to

price carbon as well as understand what the risk of return is. business will be able to unleash this entire potential for a new low carbon economy. it is absolutely critical that we get this deal. whether we get in copenhagen, that is uncertain but we will have a path forward. i think this is the best way forward in order to solve this problem. >> president obama has announced when he is going. he went with all the other leaders. what does this mean for the meeting? >> what we have seen over the past couple of weeks is

certainly an increased expectation that we will get out of copenhagen. i think what obama has done recently by setting up a provisional target, by changing the arrival date towards the end of the session which is more important, also by offering some financial increased commitment to help developing countries. >> what do you think about the prospects for a global approach for dealing with this most global of problems. this is a very attractive points? >> and surely, we need to have.

>> we are in an age where president obama will be in a position of leadership. we will be thinking about what is necessary. there is the mentality of people who are predisposed in a thinkig about near-term threats. that is physical harm.

who is powerful in this equation? my concern is people with wealth, people with the resources are the ones with inordinate control. so if you -- >> it was always that way, wasn't it? >> i think the difference is that the united states is in a position to want to confront these challenges from the perspective of wanting to do the greatest good. of course, i'm a progressive so i have a lot of things to say that are negative but i don't want to say that about the bush administration. we are in a different leadership

where the united states wants to solve them and the thing that is hampering them is the money that is governing domestic politics but on the global stage where hopefully looking at a $10 billion commitment for climate funding to help poorer nations deal with adaptation and mitigation of climate change is a small amount and we can't get global powers to agree. >> i would argue that the $10 billion fund is a concrete proposal as you point out the president sported -- supported it but it is a $2 trillion industry a year. the biggest on earth. it is a drop in the bucket. so, i would argue that what we really need to do is change the fundamental incentives facing investors and individuals including the behavior of all of i was -- all of us. the money is there. we are just directing the

resources toward unsustainable sources of energy. how does one shift the balance of incentives? let me turn to gary. in an earlier chat we were talking about if climate science were to have a cloud on it -- i'm paraphrasing -- because much the e-mails. but are there no regrets policies that would make sense for us to do in a world even if climate were not the only objective or some were not on board with saying it should be the reason to do things? you are in the real world you are in a profit-making company. tell us the businessman's perspective on what do we do anyway? >> i will give you a sample question that i'm asked with every client. how much sea level rise should i plan for as i'm building this coastal facility? in the u.s., 52% of u.s. g.d.p.

is in coastal zones that would be affected by a one-meter rise in sea level. so, what do we tell them, given that good science by its very nature has to have doubt built into it, once you move into certainty you are into faith, you are not dealing with science. and the public is very confused because they want an answer when an answer isn't possible, probabilities are only there. what we work with in our clients is getting them to recognize that they have to function under a thing called the precautionary principle. at what point is there enough information to make it cost effective for them to act in a risk management tool? and we seldom use the word sustainability because weity of that as a decision-making framework that is the most

robust of all possible risk management tools. what is the risk management approach to these issues of climate and ancillary issues that may be more important to get into. >> have you actually seen the people making investments it -sometimes it is said real estate are among the least progressive. in new york city they managed to beat back a proposal for retrofitting buildings to be greener and they are a very powerful lobby and control lots of the physical space. so we have a very powerful mayor, apparently pushing an agenda of sustainability who is losing to this hard-nosed industry. how do you persuade? >> around the world we are seeing property owners having to make their buildings more green because they are losing competitive advantage in the marketplace because the prime tenants want to be in a building

that has both qualities of health associated with the green building as well as the cache. because they don't know what their customers expect of them. i think realtor were one of the banes of my existence previously in a different job but the fact is that the customers are now telling the developers it doesn't matter whether you think it is a good idea or not, we are not going to lease -- and we are seeing history and this is in europe and the u.s., and china as well -- that when you have a vacancy, buildings that are greener lease back up again much more rapidly than buildings that are not. >> this is an interesting that you are seeing with greener buildings for even local pollution reasons they often use

paints with compounds. children like buildings why don't have nasty chemicals, you may have a reason to do things that have a win-win on climate. you spent time thinking about development issues. one of the relatively ignored aspects of climate in my view is the link between climate and poverty. there are 1.6 billion people with no access to modern energy, no electricity, clean fuels. mostly in sub-saharan trick, parts of latin america and caribbean and mostly women and girls who watch walk miles apnd face indoor pollution. is there any opportunity to put forth an agenda that might be consistent with tackling climate change that could solve this

problem for a third of humanity? >> i think there is a lot of potential for win-win-win solutions out of climate change. it is probably the single largest threat to poverty reduction and hunger on the horizon. so -- >> that is a big claim. tell me why. >> the projections on the livelihood of the poorest people and risks that climate change forms in volatile weather put it bigger than almost anything except war and conflict. so -- >> sour likely to get climate refugees? >> huge locations are projected. a lot is unknown but we know that the orders of magnitude of change are big. for food, agricultural productivity is as drastic projections for reduction for rain cash fed agricultural and if the weather is irregular or

more volatile, looking at billions of people whose food my is at risk. but given it is a big policy debate, there is a lot of opportunity to reduce those risks through investments for the poorest people and in that way because the policy response of climate change is likely to generate new shifts in the economy it is possible to envision ways poor people cou benefit from the climate regimes. that is what we have been trying to focus on. first in preventing the problem which is to mitt kpwaeut climate change and get a good regime in place and prepare for the change that we know will happen and make investments to make people more resilient. >> adaptation. >> one of the key things in copen hague is adapting to a warmer world. even those that are skeptical about warming may point to

siberia or north dakota and say a bit of warming might be good. the poorest people on earth are the most vulnerable because they tpbd to live in areas with more volatile weather or marginal subsistence farming but also because they tend to have societies that have the least capaci capacity. so surely your point is well taken. if we switch toward looking at this from the perspective what are the bottom-up solutions? you talked about corporate governance, i'm sure there will be people running off with the money and lots of scandals. it will be an imperfect and messy process. how do we counterbalance that with the reality check from the bottom up from markets, entrepreneurs, maybe from technology solutions. faiz, i know you have thought about the role of tomorrow and how it might empower. how do you see perhaps from that

perspective while at the same time the big people are working on grand institutions, how do you change behavior on the ground in developing countries? what role can networks or technology play? the editor in chief of our blog for progress. we have a staff of 15 people. you are changing the course of politics by altering the balance of power in politics with new information. those who are in positions of great wealth, and they are constantly demeaning and putting down statistics with which they disagree. when the congressional budget office comes up with a report they do not like, the trash that. whatever it might be, whoever the independent exports are, they are constantly being trashed. we need to put back on the table

things we can agree on. in their current course of politics and into the future, we can come to an agreement on a basic set of facts. the political discourse is that you do not disagree with approaches and solutions. you disagree with the fundamental facts. we cannot even agree if climate change is occurring. the speaker of the denmark's parliament says that climate change is not a real threat to and it is dangerous to talk about it. the president of south africa says that hiv does not cause aids. >> if democracy is so messy, are you suggesting an alternative? here is the microphone. here's your podium >> going forward, i think that is the role of people -- here's your podium.

>> going for, i think that is the role. the balance of power is greater than it has ever been. you can take advantage of those pools to give poor nations a greater voice. you can understand the effects of climate change next year. that is the role of these new forms of communication. we're not going to get it from the coal energy giants. we're not going to get it from the people of concentrated wealth. >> if they could get their act together, they could do it. what about putting little people on it, individual responsibility, a change in behavior? there is a popular school of thought known as nudge. it is a big brother who encourages you to encourage you -- who encourages you to do the right thing.

is there something from the bottom up that could lead people to put down the cheeseburger and switch out to their inefficient lives for efficient ones? is there something that could change behavior that comes from this school of thought from innovation technology, rather than having a traditional big brother regulating or banning behavior? >> people think they're being misled or lied to. to get people's attention to this, the uncovering of the golden nugget, that people feel like it is being held from them, the potential of changing human behavior is so ordered because of powerful actors -- that is what we have been concerned about for the past eight years,

domestically, and what is preventing released peace. those are the types of powerful forces covering up, lying, d.the seatin, deceiving. >> collect your thoughts and, when i turn to questions, please make yourself known with an animated waiting of the arms or whistle or catcalls. whenever you like. >> i would like to pick up on that. i think all of us are doing that. given the time scale of climate change, it is the business and government that needs to leave here. business is doing that already. this is an economic opportunity.

it is an economic problem, first and foremost. the longer we wait, theof the more this will cost. >> is that true? assuming we make the investments so that we have scaled up renewable energy your carbon capture -- or carbon capture, is this the only way necessarily to think about it? >> it will be harder to bring them down. 70% of the emission reductions that are needed by 2020, we have the technology to do it. it is increasing energy efficiency. it is increasing our use of low- carb and energy -- low-carb and on energy. we could put building codes in

place. we could put in a plant codes. -- we could put in appliance) china is doing it for -- we could put in applianced code co. >> is this a great green business opportunity? is that your sense of this? >> there is a lot of money to be made. there was also a lot of money made at the last carbon trading. it was made by the financial houses, not by the parties making the exchange. big is an imperfect model. -- it is an imperfect model.

i have had major professional disasters in my life. they were all rooted in the same problem. that was me trying to convince people that they ought to care about something other than they were caring about when they walk in the door. i do not see yes making progress, making people care about climate change. what we do with our clients, both public and private, is ask them what keeps them awake at night and what is the most clement responsible way to address their problems? we make much more progress in doing that then hammering them over the head over mitigation and modification. >> those are in such from the school of hard knocks. we will turn to the audience. do we have any questions? we have some microphones. let me see.

while you collect your thoughts -- there is a gentleman there. excellent. identify yourself and make events short and sweet question rather than a grab bag comment. >> from north dakota -- i am from north dakota it is cold, but not too bad. you mentioned that the government will look to establish a change in infrastructure. what changes do you think we will be able to do? the will to go for roads and dams, what would focus on green? how will the government able to provide something that will help the employment as well as the infrastructure within the united states? >> can you address the gentleman's question? this sounds like a link between the green economy and bring jobs and the stimulus as well.

>> the infrastructure side, going back to the fact that the population is moving into the cities, what we will see is that there will be a lot of i.t. and telecommunications along the value change for design and infrastructure within the built environment. i think that is where there's going to be a lot of pickup coming in the future. if we just work on -- in new york city, we haven't believe the pilot program -- we have an lled pilot program just to show that it can work. it is there to help decrease traffic accidents. you can come up with the policies necessary to drive the investments and then we can scale that kind of technology and the pace of change that we need. >> the stimulus passed by president obama included $80

billion in new energy technology. it focuses on wheeatherization, building technology that emmy was talking about, and building the smart grid. those are what we call green collar jobs. you get people other who were formally blue-collar workers. you can see employment over the next year building up dramatically in these new technologies. >> i was >> one note though on that, i was on a teenage recently on this topic with the green czar in the obama administration, and one thing she did acknowledge was green stimulus will hopefully create these jobs but maybe less stimulating than one

might think thus far. the nature of some of the investments will take time to play out. so next year or the next year and a half you will see more money come into concrete jobs and projects. and to put it in perspective china is putting in perhaps 10 times as much in real terms. now whether it is spent wisely, whether it will crowd out private investment, whether there will be a cliff in a year or a year and a half, what comes next but you have a windmill that is not quite economic without the funds. so there are difficult challenges that the history of energy subsidies and investments says you need to work out, but there is no question that this kind of investment from governments is a huge part of infrastructure. according to the international energy agency because much the collapse in credit markets investment in renewable energy

dropped 20% in 2009 but it would have been 30% had the governments not had big packages. >> most of the stimulus was counterproductive to the discussion about climate. >> how in >> because one of the conditions for the infrastructure is the plans had to be complete and in the drawer because you had a two-year window to roll them out. so, houston, one of the great examples in the world of failed urban policy, they used their stimulus money to start construction of a third ring road around houston to open up more sprawl. so, there was a portion of it that tried to do good. but because there's not been a policy in the united states saying that there has to an relationship between infrastructure and green outcomes, we weren't prepared. about.

when people say "shovel-ready," i always say, "what are your shoveling? >> no matter what we do in terms of conservation and energy efficiency, all efforts eventually are overwhelmed by simple population growth forecasts. we can all and we should tried to do everything we can, but what do -- you have to say about the absence of population control -- but what do each of you have to say about the absence of population control? >> that is an excellent question. our people the problem? >> people are the problem and people are the solution. it is as simple as that. the problem as population is far too simple. people consume in various ways

around the world. the energy and pollution produced by a single american is it [unintelligible] will to [unintelligible] i think we have to look ourselves and see that we have a much larger impact on the environment than several billion people on this earth. it is true that we want to empower people to control their fertility, to make sure says about their families, and, when they have the access and ability, they do. but when we see people as a resourced, as people to empower and support, not as the problem. >> 1 counterintuitive thing i have learned from scientists is that smaller numbers of families correspond with higher life expectancy. therefore, you have lower birthrates. you're not expect if you were living longer you have smaller

families. people make their decisions about how large their families will be based on how many they think will survive. in afghanistan, 13% of women over the age of 15 are illiterate. giving them the power to be educated and to make decisions about family decisions is hopefully going to be a solution, but not the solution >> if we actually look at population forecasts over the last 30 years, back when you have the limits to growth thinkers arguing that there was a population bomb, fundamentally, they identified a serious problem. as often happens, when one looks at strickland projections and

says that the line is good to keep going, -- when one looks at straight line projections and says that the line is going to keep going, it does not. price signals, a policy response, and positive solutions -- apart from being a population embalm, every forecast -- population bomb, every forecast shows that we have modified the population growth. it because -- it happens because of the impairment of girls and a number of other things that we have done in response to those warnings that have helped to mitigate that. it helps to live in a world of globalization and googlization. before, it was more of an elite process in the past. the more people that can apply their energies to solve these

problems, people can be the solution to the problem. >> i think the population problem is a taboo in public policy. i think back to when i was the co-author of president clinton's council of sustainability report, the sustainable communities chapter, there was a section about a population that went to -- vice president gore was all for that conversation. it went right to the president's desk and got ripped out and sent back. it was politically impossible to talk about population. it is an issue that has positive and negative sides to it. we have -- we are more comfortable to talk about population when it is growth in the developing world. population growth in the developed world is not. we want to talk about. -- is not something we want to

talk about. >> to recognize that some people are not consuming enough for now, even now, we have 1 billion people who do not get enough food to eat. we had to have a convergence of consumption the people at the bottom need to increase consumption and the people at the top need to monitor consumption without affecting our standard of living. >> some would characterize the u.s. position on climate change as not as closely participatory as our partners in other countries might like. what is the value proposition for the american electorate to be a full participant in a global climate change solution going forward?

>> speaking as an american voter, where it is in it for me? >> from a business point of view, you want the certainty. we are in the middle of the road. you see it in a bid with health care, too. you do not see where it is going. they want to know direction. if you give them the cab emissions, then they know with certainty what they can do. they can invest their money without concern that they will be stranded assets. then they can start creating jobs. we have, as americans, we have a huge stake in this. it is absolutely critical for a spirit we have generational issues, whether it is kids or grandkids. it is important that we get it right in the most flexible mechanism as possible. >> you run a progress of blog. >> you run a progressive blog

and perhaps your audience is self-selected to think positively about action but the political problem remains that we are asking politicians to act on behalf of voters who in some cases haven't been born yet or may never vote in this country. how do you surmount that problem? >> fortunately the political process is moving and i think the greatest intersection where people need to express their voice will be in the next your in the national debate where we could see collapse or success. and it hinges on whether the senate will take action. we have powerful actors who are trying to stop that both inside and outside. and i'm urging people to get involved at that juncture. we know where the battle ground is and who the battle ground senators are and this is a geographic issue. western states, some states that stand to benefit are starting to change their minds.

but in the places in the midwest and west virginia, places like that they need convincing and there needs to be more voices heard around the country on this issue. >> a quick follow-up? >> i work a lot with the chinese academy of sciences. they straightforward say we are using your debt to invest in creating a green technology and service marketplace that will run the world and the longer the u.s. from the timers away at this question is it or isn't it they are gaining a huge competitive advantage and we will never catch up. >> one more question that i want to take. there is a gentleman here. middle row, blue tie, before i turn to the panel for your predictions. >> i work with axle financial.

my question is about nuclear energy. you do hear more about the greenization of nuclear technology but it seems that you have a huge problem with ultimate disposal of radioactive waste, potential for an accident or a terrorist attack, and also the crossover of potential technology into weaponization. i wonder if anyone has a strong opinion on are we confident this is a god choice or more of a necessary evil type of situation in >> since you mentioned climate and nuclear in the same breath, why don't we ask you to respond briefly. >> nuclear clearly there are issues with it. it works well in france because 80% of their energy is a supply. it is not a silver bullet for us as a solution but in certain areas it might be necessary to come to reduce our emissions at the pace we need. >> also it takes a long time. >> you used to be an environmental campaigner at

friends of the earth. do you want to give a response? >> no, i left that behind. >> i would offer my two cents before i turn to the panel. as an old engineer from m.i.t. i looked carefully at nuclear. what bothers me is not the safety or disposal. every academy of science has agreed that geological postal, putting it in the ground is safe and can be done in a safe way when you do cost-benefit analysis. what bothers me is the economics. that is, in a liberalized electricity market which is what most of the world has even with a carbon price, the investment for nuclear or so big and lumpy it is so much more expensive than combined cycle gas or energy efficiency and front

loading two-thirds of the project cost in net present value are right up front and that means this succesceptibili to interest rate, being sued and that delays the project and i predict that except for special cases of countries where if doesn't matter like china or say eastern europe where they have a bigger problem with russian gas and big brother trying to cut them off, you will not find unsubsidized nuclear power plants being built. that is my forecast. there are cheaper, better, safer ways to tackle the climate problem. we want to be provocative that. is my particular forecast. let me turn to the real experts. we will start with you, gary. what is your forecast for 2010? >> we will put them on the big board mind you so try to make it clear, short and witty. >> you didn't say witty before.

by the end of 2010 there will be a new set of urban indicators focused on health, health equity, social equity and civility that will allow more of the world's population to enter into the conversations about climate. >> i love the civility point. >> i will start with the one that you don't have to right down that president obama will attend a u.s. world cup match in south africa, the u.s. will lose and he will be blamed for the u.s. failure. but i think that the real one is in 2010 will be the hottest year in history. >> i predict that as the economic recovery gathers strength around the world especially in developing countries we will return to an economics of scarcity with rapidly rising prices for natural resources, food and energy. >> i predict that the u.s. population will rally around and

we will get u.s. legislation on climate and energy and get a global deal in 2010. >> well, so we have predictions. i think you will agree that our panel has done their job in provoking and enlightening. join me in thanking them. [applause] [captions copyright national cable satellite corp. 2009] [captioning performed by national captioning institute] . most talked about political figures in the world. >> please welcome cal calaher. [applause] >> this has been so much fun. i am really said to be here with you guys today. i want to talk to you about something that i find extraordinarily decelerating. that is faces.

i have been watching you guys during the coffee breaks, during the drains, eyeballing you from distances. consistent throughout the whole crowd, everybody here has a face. [laughter] some of you might even be to face. i am not sure about that. but u.s. -- some of you might even be two-faced. i'm not sure about that. if one can take that face apart and reassembled it under their control, that is a formidable character. that is what economists have been paying me to do for 33 years, if you can believe it. i want to look at a phase, in particular phase, and what may happen to it over the next year. but i think the best way for me to inform you about the faces to talk to you about some of the

faces of the past and of the present. i am literally going to give you a picture, several pictures to that effect. first, i want to stir with a slide show of some prominent characters. but that was important to start back with some of myerlee work to inform you a little bit of the work that abraham lincoln -- my first character from for for trade. i did start out my life in caricature, doing it in streets. this is in london. hundreds of faces overtime come and sit in front of you and you learn about the pattern of faces and shapes and what to look for that is distinct the u.s. and individual. when i started with "the economist," it was during the era of margaret thatcher. this is one of the early covers, one of over 100 covers, that i have done for "the economist"

over my career. there were full of characters, all of them interesting in their own way. some characters supplied you with more material than others. then, of course, you had the opportunity to cover historic events. caricatures often helped define the way public people remember important events throughout history. that is why cartoons are seen in history books. bush was a cartoon that just kept on giving and giving and giving. sometimes i get confused which one is bush and which one is the other. i am unsure. he was a character who, over time, his face got more and more exaggerated the more he was in office. he also had other characters around, like tony blair.

of course, his time in office also got him [unintelligible] in addition to doing cartoons, " i told my caricatures, when people sit down in front of me, when i am thinking about them is in 3d. i made a life-size sculpture of george bush. i also turned him into an animated moving character. these are characters from today that we know. you can see the characters to play big roles here in washington. lieberman has made a kind of resurrection of late. this looks like it is made of silly putty. he is kind of moving through all of those muscles there. and then there are some people

who do not want to go away. thank goodness. cartoonists were cheering when mccain nominated her. then we come to president barack obama. when a politician first comes into the public limelight, the characters are very close to the photographs. over time, the fish gets more exaggerated. last year at this time, when we had the election and post- election, this was barack obama. he looks like he is smiling all the time. in fact, during the campaign, i had made a three-d model of him. i was on a six-city tour with " second city," the improv group. it looked like to talk to the sky and he would talk back.

it was very effective at the time. but when he got into office, things started to change. he became more sullen and serious. in dealing with iran, you can see the guy in the back. but here was, obama no longer the pearly whites showing. when it came time to deliver the stimulus, he had to take on a different position in the government. he did not look as exciting as he did during the campaign. more recently, when it came time to putting in his new orders for afghanistan, again, there was a more serious character. i want to leave the slide it there. i want to show you a little bit of what goes into the drawing of these characters. when i set out to draw some of the first time, the first thing i am looking for is the shape of their head.

it is so interesting that you can spot somebody it across a room or on the other side of a football field and you can recognize them without knowing their very subtleties of the face because the shape of their head is the distinguishing character. i want to start with a character whose face a really enjoyed drawing. hihis back in the news with copenhagen. that is al gore. he has the distinctive shape to his head that kind of goes one line like this and then the other line like this. that is where you start with outboard. -- that is where you start with al gore. he has the years. he has the use of spock from of a " star trek -- from "star trek." he hasn't elvis-like smell of

that goes like this. -- he has an elvis-like mouth that goes like this. he lost the 2000 election because of florida. i'm telling you that is not it. he lost the election because he has the eyes of death. that is al gore for you. what you think? am i right? [laughter] am i right? [applause] right. so we will sign this one here. there you go for you. let's draw another character with a distinctive face. john kerry -- long faced by. his face starts to appear and

it is a long face, long phase, long face. look at that, look at that. no. ok, this is better. it goes up like this and like this and his nose is like this and his hair is like this and there's hair and his use come here like this and we have a line here and in line here. ladies and gentlemen, what you think? john kerry? [applause] not to. -- not bad. not bad for a few strokes. who wants this one? can you pass this to the gentleman back there? that is a good way to start a riot. let's go with another democrat war. bill clinton. ok.

he has kind of a turned up nose like this. he has a little bit of it turned it up mouth. and then there are the bags under his eyes. poor guy. have you noticed that he has more and more bags under his eyes. that is really hard. he travels a lot and they charge for every extra bag. [laughter] and then he has the used car salesman hair cut. and then look at this. here is the bid. that is the bet that distinguishes the man. what you think? [laughter] bill clinton [applause] . all right. let's go to h.w. bush. know. let's go to h.w. bush -- let's go to w. bush.

the years can never be too big. but the interesting thing about his face is that, over time, i abbreviated him so fast that i can turn him out in six seconds. he has very strong flared nostrils, a set of parentheses, a civil like that, horizontal line, horizontal line, and a few lines like this. his chin as a w. then you have the strong growth like this. and you have tiny eyes, a tiny eyes. then the years. let's abbreviate the years a little bit like this and like this. then you have another parentheses here. then you have lines like this, which i called the perplex lloyoid. then you have george w. bush. what do you think? [applause] not bad. not bad.

let's get on to president barack obama. it is interesting watching him over the course of time. he had a very young taut face when he first ran for office. the the combination of gravity and gravitas have worked its toll on his face the way it does. you look on the picture of any present, over four years, their faces age at an exponential rate. -- of any president, over four years, their faces age at an exponential rate. you have a nice round top of the head. the years are a big portion of the balance of the head right now. but here is the important bit. he casts a heavy shadow in his eyes and you don't often see his eyes at a distance. you can see somebody at a

distance, but they tend to be small, like this. his nose is quite small. he has a strong upper lip like this. you can see his face start to appear in front of you like this. drawing him and seeing the style of his portrait from the site, i am beginning to think that, the more i looked at him, i do not think he was born in hawaii. i think he was born on easter island. [laughter] do you not think? that is more of what looks like right now so we have obama. ok. but now i am going to draw him from the front. i want you to look at this frame in the back. once to draw attention to the

lines in his face and around the mouth, they're going to gain attention, not just from the cartoonist, but from everyone. you begin to understand how he moves and the way he talks. . >> in this case i will do two versions of obama, to show where we might be going. we will start here and have this long "v" shape here and we will have these strong lines, like we said before.

little eye, little eye. and this is interesting, what i call the oval, it's this line here and here, and it's this muscle that will get more exteniated and this muscle will move and this line will get stronger. so his upper lip like this and this here, and ladies and gentlemen, that's barack obama. that's what he looks now, and show you what he will look like in a little while. put my new pad up, put this here and take this pad off here. what he will look like in a year or so from now will be, this part of his head will get rounder. the ears will get bigger. this will get strong, but it's

this oval thing that you will see exteniation like this, and he won't smile a lot.ney and still the long chin. and that will be enough to define barack obama in the years to come. his ears will get bigger and chin longer and he may get four or five more lines. that leads to a couple of prediction says. -- predictions. get the slides back up for a second. like this now, this cartoon took place early in his time as president. in 100 days, he is beginning to get gray and look a little older. 200 days, a little more. 500 days, it is going pretty fast. 1000 days, watch out. he comes around for his election

bid in 2012. this is what we might see. i think he had better fix social security fast, if that is the case. i will leave you with one final prediction. we just came out with a new wall calendar. when "the economist" approached me and said let's do a calendar, we would just put some cartoons of on the top. i said today, anyone can do that on their laptop. the digital world is so amazing, you can do just about anything. if you want to do something special, it has to be completely hand drawn from top to bottom. this is true, in the world of cartoons and animation, you are finding that more and more digital work is finding its way in, replacing the conventional way of delivering art and

information and publications and in animation. the new digital stuff is awesome, but i think you'll also find that as the digital stuff moves out some of the traditional handpainted work, that work will become more and more valuable and more and more appreciated over time. that is my prediction for 2010 and beyond. thank you very much. >> i was interested in this and talking to economists. and i think that "the

economist" has an incredible source of information. and in this time of significant financial crisis in this country with all the talk about stimulus packages and bailouts and that sort of thing. what is missing in the conversation is the need to focus on schools. because i believe that in the long-term we are never going to regain our positioning in the global marketplace until we fix the problems of public education in our country. if you look at statistics in 2006, the last piece of results are indication of this, we were 23rd of oncd nations in terms of mathematic achievement that was well below the average. and in science we were 17th, again below the average. if you look at the statistics

and what our projectry has looked like over the past decades, you can only determine from that that we have not solved our problems. that we are only further falling behind the rest of the globe in terms of the quality of education we are providing it our young people. so the question that a lot of people ask, is what do we do? how do we fix this? i can tell you definitively one thing that is not the answer, which is let's throw more money at the problem. and the reason is because here in the washington, d.c. public schools we spend almost more money per child than any other urban jurisdiction in the country. and our results are at the absolute bottom. when i took control of this school district in 2007 because the mayor got mayoral control.

i inherited a district where we had a 70% achievement gap between our white students and black students. and of all the ninth graders that began high school only 9% would graduate from college in five years. we had a circumstance where we were the only school district in the country on high-risk status can the u.s. department of education. and of all the eighth graders in the district according to a test of progress, only 8% were ongrade that , meant 92% didn't have the skills necessary to be productive members of society. and probably the most disheartening data is about our little ones. and that shows that our

children come into the system relatively on par with kids that look like them. we know by the time we get them in kindergarten, they are behind those in fair -- fairfax and other areas, but the problem that the longer they stay in our district, the worse off they are. and the poor black fourth graders in new york city are operating two full grade levels ahead of the poor black fourth graders in washington, d.c. if you want to blame the poor grades in d.c. on poverty or home environment or the lack of home health care.

when i looked last time the poverty in our area is not different but we are operating two grade levels below. clearly the money is not the answer, we pour money into our system and those are the outcomes that we produce. if money is not the answer, the question is what is? and my proposition is that we need to radically alter the quality of human capital in the district. and so this is what i will leave you with, an economist is about to come out with a study that will show if you were to take the bottom 6-10% of ineffective teachers in this country. and replace them with just

average teachers. so you take the worse 6-10% and replace with average teachers, not the rock stars. we will catapult this country to achievement levels to at least canada that is sixth in all international countries and potentially to finland that is number two. that one action of removing the bottom 6-10% of ineffective teachers could have that impact on this country. so the question is why don't we actually do that? and what i will say is this, i believe that part of the problem is that people don't like to talk about removing people, they just want to talk about, and if you look at this study, he talks about the deselection of teachers, i thought that was an interesting term.

the obama administration are doing a tremendous amount about this. and in the race of the top initiative they have addressed this initiative head-on, saying that states will be eligible for race-to-the-top funds only if they meet certain initiatives. and one is to ensure that you link teacher effectiveness, how well a teacher is doing to their student level data in several states across the country. there are actually laws, there is legislation that prohibits the linking of how your students are doing to how we evaluate you. that makes absolutely no sense whatsoever. what that means that you can in lots of places across this country be a teacher that does not just meet your goals of how much growth to see a student

make. but you could be a teacher that every year your students go backwards and you still remain employed year in and out. because there is no ability to look at how well your students are achieving in that. so my prediction for 2010 is that i think we are going to be having a lot incredibly difficult conversations about some difficult decisions we need to make in this country as it pertains to teacher quality and making decisions on behalf of children. at the end of the day when you talk about moving out poor performance, you get lots of opposition. you get lots of push-back. people don't want to talk about those things, they want to talk about professional development. but at the end of the day, it's important for us as the adults in this country to stop the

practice that's been going on for decades. that we are all too willing to turn a blind eye to what is happening to children in classrooms in the name of harmony among the adults. and we enable this kind of system to continue on, when in fact it's producing dismal outcomes for kids. hopefully in 2010, particularly with the race-to-the-top we will look at how to move forward. i will take a couple of questions. [applause]

>> good morning, i have a question about lead indicators? >> we have a lot of them, we look at drop-out rates and we have 50 different standards and 50 different tests evaluating those. and one thing that duncan and the obama administration is moving towards a set of core national standards and a national test. at the end of the day when the children in washington, d.c. will not be competing for jobs with kids in nashville or san francisco, they will compete with kids from india and china.

we have to gauge how they are performing compared to their counterparts that they will compete against. a move towards national starts is important. here in d.c. we are looking closely at deficiency rates and the achievement gap. i told you i inherited the racial achievement gap.bç at the district level and the school level we are looking at whether we are able to close that gap. and to ensure that every child is getting a quality education and that the rate and income level for our students is not the determining factor for their educational attainment levels. >> hi, i am pamela, my mom is a teacher. and you said that in 2010 you

will address the conversation of the quality of teachers in america. payment of teachers in america? >> i am trying. not too long ago, we introduced a proposal. that would call for a radically different compensation system here in washington, d.c. and it was very interesting, what we called for is a two-tier compensation system. every teacher would have their choice of which to go on to. you would have the red tier and there you got a 24% increase in raise pay and $10,000 in cash bonus and your rights and privileges stayed the same. or you could take a 45% increase in base pay and have bonus possibilities based on your student achievement level

growth. for example a first-level teacher in d.c. makes $40,000 a year. and we instructed this for that teacher to make up to 78,000 a year. at the most senior levels the teachers make a base of 60,000. that teacher that chose green and seeing significant progress for their kids could make up to $131,000 a year. dm this new structure by your seventh year of teaching, you will have a base salary of $100,000 a year. i thought this was brilliant, everyone has a choice and everyone says that teachers don't make enough money, i will pay the teachers a six-digit salary and i will be the hero. i couldn't be more wrong.

but in order to go on the green tier, you had to give up your tenure. and it caused a storm, saying that you can't differentiate and all of these things. so it's interesting because we put something incredibly aggressive on the table to achieve how teachers compensate to output differentials that were greater in scale. and now we have been in a -- in ongoing negotiations with the union for now two years. because we cannot move forward on this. >> i have a quick question on the student/teacher ratio. i have a little boy in the first grade in d.c. public

system, big supporter of the public schools. but there is 28 kids in the class, and the school put in a new playground at the cost of $1.2 million, i understand the budget allocations are coming from different areas, but think of how many good teachers could be hired. the playground was good before and it's fabulous now. could you comment on that? >> i think that part of the reason why if you look over the last couple of decades, the schools and the facilities came into such significant disrepair was that calculation. people were saying let's put more money into people and not these infrastructure issues. and i think that is what has lead to the decrepted situation of the our schools across the country. i think that significant investment in infrastructure at

the front end now that will last for years and years. you can't see it as a one-time expenditure. i know, i am a parent, and i know that all parents love the idea of smaller classes. but the data doesn't bear out that they get a better education. it doesn't show that class size has at all a significant impact on student achievement levels. and particularly when you don't have effective teachers in the classroom. in our schools with the lowest student/teacher ratio, it's where the employment has declined and the schools aren't doing well. and in those schools the student/teacher ratio is positive but if you look at their levels, they are

deplorable. >> hello, i am from the chamber, and this topic is complicated. one my friends a real estate developer left his career and now teaching in one of your schools. and the classroom -- he probably will kill me for bringing this up. the classroom is ugfalling ap and he's been abused by students. he teaching a class of what they call repeaters. kids that have gone through algebra i and failed and going through it again. one thing i don't have my hands around, i assume he's an effective teacher and has a lot of cards stacked against him, when you look at gauging a teacher's effectiveness, how do you take all of that into account. i don't just understand that totally. >> so welcome to my world.

and i know that the teacher you are talking about -- i think the first thing we have to do quite frankly and we have been doing it more and more, to set clearing expectations on the teachers at what responsibility they are accepting to teach at one of our schools. a lot of people come to me, we like what you during and you see energetic, but you are not going to be successful. and i say gee thanks why. because the schools are a reflection of the systems, and you will have disparities, and you have the wealthy neighborhoods and great schools and poor neighborhoods and poor schools. i disagree with that contention.

and how do i articulate why that is not the case. and about a year ago ?gri had dinner with warren buffet. and there i was in omaha at this steak house and he's a d.c. school graduate. and he said, michelle, it's easy to fix the problems in public education in america today. and i said wonderful, please tell me how to do it, so i can run back to d.c. and implement that. and he said all you have to do is make private schools illegal and assign every child to a public school by random lottery. so think about that for a minute, if we did that in d.c., that meant every ambassador's child and c.e.o.'s child and

the president's children would get assigned to a d.c. random school by lottery and many would go across the river to anacostia where a lot of our schools are. and you would never see a faster move of resources than that. and i guarantee you that quickly we would have a system of excellent schools. so in my mind it's not a matter of whether it's possible for a quality education. it's possible. the question is that if we as adults in this country have the wherewithal to make this a reality for every kid. and the answer to date is that we are not willing to make those decisions. and it means that our teachers have to take personal responsibility to ensure that every one of obstacles that our

children are faced with everyday, that they believe it's possible to overcome those obstacles to ensure that they are successful. if you look at what some of our kids face everyday, those are real challenges. they cannot be ignored. but if you believe that those challenges are too difficult to overcome. then i say, you need to teach in fairfax county. it doesn't make you a bad person, but there you don't deal with the same issues we do here. you can do good things for those kids. but if you teach my children in this city, you have to wake up everyday and feel a personal mission to live up to our promise as a nation. regardless of your income level and race and personal home circumstance, we will provide a

great public school education so you can live the american dream. there is no way to succeed unless we have that mind-set. and we have schools around the city that shows it's possible. we have these islands of excellence and these success stories around, and we need to proliferate those across the city. i think i am running out of time, i will take one more question. >> i am a mom. i send kids or two children, one in eighth grade and one in fifth grade. and i wond -- wonder if some concept, i grew up in a public education and had involvements, and in d.c. many issues abound,

but to open up a townhall open discussion, where the people, the unions and the parents in as much as you can to help assist you. because it's so dynamic. the issue all around. >> we have lots of open community forums. lots of opportunities for people to yell at me about various things. and interestingly enough, what i have found when we have open town hall forums, we don't get a tremendous amount of participation in those. the meetings where there the greatest amount of participation is when people are unhappy about a decision, i am closing a school or removing a principal. or something like that. what i would say that this idea that generally we come together and talk about education and how to improve education in the city is too nebulous for people

to understand and to get engaged in. and it happens more successfully on an issue by issue and school by school level. thank you. [applause] >> in his weekly online address, president obama talks about a connection between al -queda group and the christmas day attack. he talks about the address for the policies that lie ahead for an nation and the need to come together to solve the problems. >> it's now been more than a week since the terrorist attack on christmas day. on thursday i received the review that i ordered from the

terrorist system. i advised john adams to lead these going forward. as i said this week, i will do everything in my power to make sure that our hard working men and women in law enforcement and homeland securities have the tools and resources they need to keep america safe. this includes that these communities and people in them are held accountable at every level. and as president that's what i will do. meanwhile the investigation on the christmas day suspect continue, we know that he travelled to yemen and that he joined as a member of al-qaeda and they trained him and equipped him with those explosives and trained him to head to america. this is not the first time that

this group has targeted us, they have targeted hotels and embassies, including ours in 2008, killing one american. as president i have made it a partnership to strengthen the yemen government and work with them to strike al-qaeda terrorists. and even before christmas day we had seen results, and all those involved in the attempted act on christmas, must know that you will be held to account. it's been more than a year since i stood on the steps of the u.s. capitol and took the oath of office. and with that oath is the responsibility that i carry with me everyday, the responsibility to protect the safety of the american people. and on that day i made it clear, our nation is at work with the far reaching war of

violence and hatred, and we will do what it takes to uphold our country. and make no mistake, that's what we are doing. that's why i refocused the attack in iraq and have resources where al-qaeda is based in afghanistan and pakistan. and i have set forward a mission to defeat al-qaeda and it's allies and prevent their return to either country. and it's why we form new partnerships as in yemen and have plots where they train. and often out of sight our progress has been unmistakable. along with our partners we have disrupted terrorists and cut off chains and derailed plots

here in the united states. and as we were reminded this week by the sacrifices of more brave americans in afghanistan, including those seven men and women of the c.i. a., our hard work is never done. let us affect -- ask the questions that need to be asked and protect each american and official. and remember this, our adversaries that will attack our country, and not forget what has carried us through the time of trial, including those attacks eight septembers ago. let's renew that timeless american spirit of resolve and

confidence and optimism. let's summit the unity that we need to keep our country safe. as we begin our new year, i can't imagine a more fitting new rule to guide us as a people and nation. >> this is senator mcconnell from kentucky, we have qualities that exemify us as people, one moment took place in 1777, the continental army under the direction of george washington had finished a surprise attack on the british in trenton. instead of retreating washington orders his troops to stay and fight. it was a daring move.

when the soldiers of the continental army saw the raid of the army against them, many were filled with dread. and as the story put it, in that awful moment the men had a sense in their strength and confidence of one another and the feeling that providence was with them. against all odds, these rag-tag patriot had a victory, they had triumphantly shouted as one. the second battle of trenton was a great victory for washington's troops. 233 years later americans have not lost the spirit of trenton. two long and difficult wars, a prolonged recession, double-digit unemployment, these are difficult days for

our nation. and in this new year we are grateful for the men and women that keep a lonely watch for the cause of liberty. and we are painfully aware of how many americans out of work this christmas. but this does not define us as a people. what has defined americans in the most daunting difficulties, in this new year we can be filled with hope and optimism and that greater days are ahead, and in these difficult times we will persevere as we always have, for the good of all of our countrymen. for we believe for to those for which much is given, much is expected. some look to washington and see many disagree and not solve many problems.

and while it's true, it's important to remember that we are united by the love of our country and no challenge is too great for the american people to overcome. disagreements will be ahead, but americans expect and deserve their elected leaders to put country first and work together to solve our problems. powerful forces may be aligned against us just as they were against that coninental army on that night in 1777. but when americans are together, they will join ranks, it was true in trenton and today, thank you and happy new year. >> here's a look at our schedule, coming up next a look at a new law of mental health

parity, and that's followed by a senate hearing of children and disasters. and after that journalists of economic downturn and talk about developments in the financial market. today on "america and the courts" supreme court suter and how they take cases. america and the courts today at 7 p.m. eastern on c-span. fox news contributor michelle malkin is our guest, the blogger and author of four books, takes your call, e-mails and tweets. three hours with michelle malkin, live at 2 eastern on book-tv. >> and now a look at a new law

from this morning's "washington journal" this, is about 45 minutes. host: first time guest to the "washington journal" is dr. david shern, and we understand that a significant federal law is taking effect this week in the area of mental health, tell us what is happening. guest: we have been working for years, to get this bill passed. and what this act does is it ends the historical pattern of discrimination of mental health in terms of health coverage. host: when we talk about mental health, what are we talking about? guest: there is a wide range, the most common is depression. it affects 15-18% of people throughout the course of their

lifetime. additions are common with alcohol abuse addiction is the most common. and there are anxiety disorders and severe illness and schizophrenia and it's a wide range of diagnosable and treatable conditions. host: what does this new law do? guest: it eliminates discrimination, so what standards are used to determine medical necessity and that has not been the case. host: for an individual, what does this mean for them if they pursue a doctor?

guest: it means they will not pay more or have discrimination on their treatment for a general medical condition. it equalizes that. and prior to this many insurance policies had a $50 co-pay. if the fee was $100, the person would have to pay $50. many plans have a 10% co-pay, then you would pay $10. if the fee is now 100 dollars you have that same co-pay. host: let's review our numbers, the lines for democrats and republicans and independents. and the law, you mentioned the 12 years of pursuing this, tell us about how this law came to be.

guest: the original law was championed and by paul wellstone, he passed away and killed in a plane crash. he was one of the most liberal people in cbe$e united states senate. and pete was one of the most conservative. and they formed a strong alliance around this issue. and they had first-hand experience with what discriminatory health insurance does to make it difficult to get the care you need. and they launched a battle that persevered beyond paul wellstone's death and they got the bill passed on october 3, 2008. host: and we notice that the plan is for 51 employees and

speak to that battle of the insurers and others, how does it play out? guest: the initial argument rested on the fact that we had bad data from a good experiment done by the rand corporation years ago. and estimated that mental health services if one reduced financial barriers would be overutilized. and this lead insurers and large businesses to oppose the equity in terms of treatment. what happened is that we entered managed care. and we have good data that indicates that there is not this elasticity of demand. and that data helped to even the playing field in terms of

cost considerations. and the bill like all bills had a series of compromises in it. and one of them we were not excited about that mental health services are not mandated under this bill. and that was important for the business community. however the data now is compelling that no competence insurance plan cannot cover mental health and we don't feel that's a practical important feature. host: you called this a great civil rights victory, how come? guest: because a class of people have been historically discriminated in terms of their ability to access the services they need to get better and to get back into their life. that lead to a stigma and it discouraged people to use

services that could be effective to them. and it discriminated to them with a basic, fundamental health situation that is treatable. host: we encourage mental health patients and professionals to call. our first caller is from illinois, thomas on the independent line. caller: good morning, thank you, my question to the good doctor would be that it seems to me the psychiatric community will lean to medicating the people than to the true root cause of mental disorders such as bipolar, thank you. host: medicine verse therapy and other treatment, how does the bill affect this? guest: the bill has equity of care, and we are waiting for

the results to be released, which should happen next week. and we will see when those are released what they do with scope of services. and the caller has a point that is controversial, and that's the use of medications to treat mental health conditions. and is there good data in terms that medicine can be effective in treatment. and the good news is that there are a broad range of services and strong evidence that indicate psychotherapy if done compently and result in the same changes of brain function as treated with medication. there are multiple strategies, you don't have to take medicine, but ey